Pages

Wednesday, May 5, 2010

Talking about bookkeeping and accounting is fun for me. Weird...I know. It's like a game for me...crunching numbers and figuring out what to do with the information is what I do and what I know. That's my expertise.

But...

I know y'all HATE the numbers...it's OK. You don't need to learn how to love them like I do. You are however, obligated to understand them. Here's why...

To avoid overdraft fees in your bank account - Don't waste money by giving it to the banks...we've seen what they can do with our money...it ain't pretty. Keep that money in your pocket by balancing your books often.

To avoid being dis-organized at tax time - Shoebox filing is NOT the way to go. Setup a simple, easy to use filing system so when it's time to give an account to Uncle Sam, it's easy and stress free.

To be able to make informed business management decisions based on the financial health of your company - This is key. You can't run your business efficiently if you don't know when to increase or decrease expenses. And you won't know when to increase or decrease expenses unless you can "see" them in an organized way. Utilize the reporting features in your bookkeeping software. And if you don't have Quickbooks or some other software to help you manage, then setup a spreadsheet to track money coming in and going out.

Knowing your ROI - One of the major indicators your management reports will give you is whether or not you are getting a healthy return on your investments. For example; you paid $500 for an ad in your local wedding publication. If you don't track the revenue dollars and where your leads came from, you'll never know if that $500 investment was worth it. Include a coding category for lead sources when coding your sales dollars so you'll know where to increase or eliminate where you spend your marketing dollars.

With a streamlined, efficient bookkeeping system you'll have more time to work on the creative, "glam" parts of your business. Let's face it...working on the "business" of running your business is not our favorite thing to do. Having systems in place allows us to "set it and forget it"!